Since you are pledging your gold as collateral to the lender, the interest rates are not high. The Gold Loan Calculator is used to compute the most reasonable EMI for the borrower to pay conveniently. The banks and NBFCs offer various schemes and benefits to the borrowers to make their Gold Loans experience tension-free. Another advantage of gold loans is that you do not need to depend on only one loan repayment mode. There are multiple ways to clear off your loan dues and choose the most suitable repayment strategy that suits your budget in the long run:-
There are multiple ways to clear off your loan dues and choose the most suitable repayment strategy that suits your budget in the long run: -
Paying the simple EMIs like other loans: - This is the general method like that of other secured loans where the borrower pays monthly installments to the lender till the loan tenure ends. You need to complete the full repayment before the Gold Loan tenure ends. Otherwise, the lender will have the right to sell your Gold to acquire the remaining Gold Loan amount.
Pay off interest in EMIs and the principal amount in the end: - Instead of paying the installments as part of the principal amount, interest rate, you can pay only the interest rate applicable monthly and then the overall principal amount as a lump sum upon loan maturity.
Choose the option of Bullet repayment scheme: - This scheme means that you can pay off the loan amount, total interest rate as a whole entirely when the loan tenure ends, i.e., no need to worry about monthly installments; you can simply repay the real money once the loan matures. This scheme is only applicable on short-term loans of up to 6 months.
Make flexible partial payments: - You can make part payments of the principal amount plus the interest payable as per a flexible repayment strategy. This is better for those who cannot follow a specific schedule of making payments on time. Customers can reduce the repayment amount by paying an initial part of the loan amount and then making the part payments to ease off the burden in the long run.
While banks and NBFCs allow you to adopt different schemes and strategies to repay the loan amount and interest rate, there is also the option to either opt for cash payments or online payments. Borrowers can organize an auto-debit facility with the banks to pay the monthly or quarterly installments. Many banks also provide the facility of paying directly through their mobile apps.
IDBI Bank also provides the option for Gold Loan repayment through different schemes via their Mobile Application. The IDBI Bank Gold Loan has a tenure of a maximum of 24 months, where the borrower can be availed of a maximum of Rs. 5,00,000 as the loan amount. They also offer agricultural Gold loans to farmers at low-interest rates to buy new seeds and machinery or other farming requirements.
Since the banks and NBFCs do not set eligibility criteria for the applicants, the process of Gold loans is fast and more efficient, and open to more people like farmers and housewives. All you need is at least 50 grams of Gold to keep as security and get the money according to the purity and quantity of the pledged Gold.
Conclusion:
You need to make sure that whatever strategy you choose to repay the loan must not burden your daily expenses. The scheme should suit your lifestyle and must be one that can be completed within the loan tenure. If you are trying to make partial payments or think of foreclosure of the loan before it matures, make sure that there are no additional charges that may affect your finances.
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